CMS PEPPER Report to Include Total Knee Arthroplasty (TKA)

CMS PEPPER Report to Include Total Knee Arthroplasty (TKA)

As part of its compliance program, every hospital should conduct regular audits. This will ensure charges for their Medicare services are correctly documented and billed. The Program for Evaluating Payment Patterns Electronic Report (PEPPER) is a quarterly electronic data report that contains a hospital’s claims data statistics for Medicare Severity Diagnosis-Related Groups (MS-DRGs) “and discharges at risk for improper payment due to billing, coding, and/or admission necessity issues” (PEPPER, 2020). CMS has approved the addition of a new target area to the quarterly PEPPER report; this is related to inpatient total knee arthroplasty (TKA) (PEPPER, 2020).

Furthermore, each PEPPER report contains statistics for the most recent 12 federal fiscal quarters for each area at risk for improper payments; the reports refers to these as “target areas”. PEPPER lists the target areas here (PEPPER, 2020).

In addition, all of the data tables, graphs, and reports in the PEPPER report help the hospital identify potential overpayments and underpayments. PEPPER also provides comparative data. This allows hospitals to review their performance in comparison to hospitals in their Medicare Administrative Contractor (MAC) jurisdiction, their state, as well as the nation.

As you may recall, effective 1/1/2018, CMS removed TKA procedures from the inpatient-only listing. That change allowed providers to perform TKA procedures either on an inpatient basis or an outpatient basis. This will be dependent on the physician documentation regarding the anticipated hospital stay as well as the patient’s clinical circumstances.

This new target area can assist hospitals in monitoring the delivery of TKA procedures. The new TKA procedure target area will be implemented in the Q3FY20 PEPPER.

Additional Information

Conducting regular coding audits is a necessary function to run an effective compliance program. Outsourcing coding audits to a partner like YES HIM Consulting rewards organizations with detailed trending data and actionable insights to achieve compliance. Contact YES HIM Consulting today to hear more about our auditing solutions.

Karen Youmans

Karen G. Youmans, MPA, RHIA, CCS – President, YES HIM Consulting, Inc. AHIMA-approved ICD-10-CM/PCS trainer

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